Credential - Deals in action: Archer Capital acquires Lend Lease Primelife Aged Care

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Archer Capital’s recent acquisition of Lend Lease Primelife Aged Care shows that sector knowledge, combined with patience to pursue your capital agenda objectives pays dividends. Archer Capital has acquired a great platform to grow the business supported by positive sector dynamics.

Our client

Archer Capital is one Australia’s leading private equity firms, with $3 billion in funds under management. Since its inception in 1997, Archer Capital’s Partners and executives have closed over 30 acquisitions involving total aggregate funding in excess of $5 billion. A hands-on, operational approach is an essential part of Archer Capital’s investment process, from opportunity assessment to ongoing portfolio company management. Archer has consistently delivered top quartile performance to its investors throughout its existence.

What was our client’s capital agenda?

Archer is focused on creating value in its investments, looking to secure strong performing companies and driving performance through refocusing on core activities, providing growth and development funding, hands –on and practical assistance and appropriately incentivising management. This has proved a very successful model for Archer, assisting it in providing investors with considerable returns over an extended period of time.

True to its investing culture of detailed and thorough analysis, Archer had been investigating the Aged Care sector for some time and the EY Transaction Advisory Services team were able to assist in this journey thanks to our extensive experience in the sector. This approach resulted in Archer Capital’s recent acquisition of the Lend Lease Primelife Aged care business (since renamed: Allity) for $270 million in March this year, including 30 facilities - 2338 beds and a development pipeline.

Allity is one of Australia’s top five private for-profit aged care operators. Our understanding of the rapidly changing aged care sector allowed us to help Archer Capital navigate through uncertainty and provide quantitative data to support this acquisition.

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The acquisition process

The EY Transaction Advisory Services team provided a wide range of services to Archer in its acquisition of Prime Life, in the period November 2012 – March 2013. This work required the provision of an integrated service offering to assist Archer Capital in understanding key risks and value drivers for the transaction, and ensure these risks and issues were identified and managed during the time.

Pre-Acquisition Support

  1. Transaction Support including financial due diligence and industry expertise
  2. Transaction Tax
  3. Tax structuring advice
  4. Stamp duty advice
  5. Real Estate Advisory Services: real estate valuation - assessing valuation of 30 facilities
  6. Valuation & Business Modelling
Tomas Chubb, Executive at Archer Capital comments:
“It was imperative that this transaction was executed efficiently and we were under pressure to pursue this transaction under tight deadlines. EY delivered a team of industry specialists, with positive senior executive involvement, across a number of different services which helped Archer Capital navigate the execution of this complex transaction”.

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Driving exceptional service

EY’s Transaction Advisory Services team's ability to provide excellent client service, on a consistent basis over an extended timeframe, provided Archer with confidence in our team. This also enabled us to broaden our scope of services which Archer knew would be completed in the right way and at the right time.

Our history with the asset and sector enabled our team to work efficiently with Primelife Aged Care to obtain financial and key operational information, identify key risks and opportunities, and ultimately achieve Archer Capital’s objectives for the acquisition at the optimal terms and conditions. This, in turn, enhanced mutual trust between Archer and the EY Transaction Advisory Services team.

The outcome

Archer Capital has acquired a great platform to grow the business supported by positive sector dynamics. Our team have generated trust and knowledge of the asset and key management which will prove invaluable for our ongoing relationship with Allity. Following this acquisition, we will continue working with Archer Capital on further projects including Purchase Price Adjustments, Assurance services, and a Controls review.

Bryan Zekulich, Partner at EY and Global Client Service Provider for Archer Capital comments:
“Consistent performance of exceptional client service, where the EY team is able to demonstrate its skills, passion, teamwork, ability to think commercially and knowledge is the best form of referral. This deal showcases the quality of the EY Transaction Advisory Services team to Archer, who are a key Private Equity account for Oceania.”

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